National Bank Notes | A Story

At the Stamp & Coin Place, we come across large amounts of varying currency every day. We like to believe that each note tells a story. This is the story of the National Bank Note .

Up until the American Civil War, state banks issued their own unique banknotes. That changed in 1863 when the National Banking Act required federal regulation to issue National Bank Notes. The Office of Comptroller of the Currency claimed administrative responsibility of the chartering of banks and issuing of National Bank Notes. To encourage the hurried implementation of these new notes, the federal government placed a 2% tax on state banknotes. To speed the conversion to the new system, the tax was increased annually to 10% and then up to 20% before they became obsolete.

Stamp & Coin Place National Bank Note

For the next seventy years National Bank Notes were issued by banks all over the country including U.S. territories. Banks with federal charter deposited bonds in the United States treasury so that banks could then issue notes worth up to 90% of the bond value with the understanding that the federal government would back the value of the notes. The government was able to back the notes because the demand was high enough to support the new system. The new system effectively monetized federal debt. Bonds functioning as collateral maintained circulation privilege and their interest made them preferable for National Banks.
Each National Bank Note is unique in its markings. Individual characteristics along with a rich history make these notes appreciable collectibles. Each note bears the issuing bank’s national charter number as well as a serial number given by the bank. Notes with low serial numbers are excellent collectibles and were even recognized as having particular value as they were being printed. The officers who signed them realized their potential collectible worth and often kept them as souvenirs.

National Bank Notes are physically much different in appearance than the currency we use today. They are predominantly large (with smaller notes nearing the program’s end). The large notes displayed two serial numbers, a treasury serial number which indicated the number of notes per series and the bank serial number, indicating the notes and denomination of notes printed specifically by the issuing bank. They bore four signatures, two of the Treasurer of the United States and Register of Treasury and two by the bank’s President and cashier. They were often cut with scissors and many are uneven or display signatures split between two notes. The faces on these bills were many and varying; not immediately distinguishable by denomination.

Small sized bank notes took on a different appearance along with greater continuity and attention to detail. Design characteristics included the same portrait per denomination and similar decorative features. These changes influenced US. currency from the 1920’s up until the early 1990’s. Elaborate, unique details and signatures were conformed to a simple bank stamp and serial.

These notes constituted a fairly effective means of trade until the Great Depression when legal tender was limited to Federal Reserve Notes, United States Notes and Silver Certificates. Privately issued banknotes were ousted and thus found their official place in the collector’s world.

Because of their unique appeal, National Bank Notes are often referred to as “hometown notes”. With much variation and specific markings, it’s easy to see why they they are highly collected, especially in the United States today. While larger issuance batches are inexpensive, notes from rare banks, towns and states can be quite valuable. A single note sold in 2010 at a Walla Walla Heritage Auction for $161,000.

Each note tells its own tale has the ability to take one back to a time and place before. At the Stamp & Coin Place, we are curious about the past as it leaves its mark on the present. Check out some of our rare National Bank Notes at The Stamp & Coin Place shop!